In an op-ed piece
published November 4 in the Toronto Star, the leader of the Liberal Party condemned the income-splitting rules as a benefit for the wealthiest of Canadians.
Worse still, it virtually eliminates the federal surplus while providing those earning $100,000 or more per year with almost half the benefits projected to flow from the proposed changes.
WP spoke with Investors Group tax specialist Aurèle Courcelles last week after the new rules were announced; his reaction was positive stating that the changes
“puts more disposable income in the hands of families.” He further emphasized that there is a cap of $2,000 ensuring that the wealthy can’t run up the bill.
Trudeau clearly doesn’t see it this way making the income-splitting rules an obvious election issue come 2015. Included in the online version of the article is a survey asking readers “Do you support income-splitting for taxes?”
If the Star’s readership is any indication, initial results suggest Harper’s move to help families could backfire with the general electorate. Upwards of sixty percent of respondents feel these rules don’t favour most Canadians and are especially hurtful to low-earning single parents.
Social commentator Linda McQuaig uses an example of three different families with children each earning $100,000 in total household income to illustrate the injustice of the Family Tax Cut
. One family is a single mother, the second two spouses earning $50,000 each and the third is a husband earning $100,000 with a stay-at-home wife. The first two get no benefit from the Family Tax Cut while the third benefits to the tune of $2,000, the cap under the new rules.
Everyone seems to have an opinion. Yet not everyone can be right, can they? Come election time next year it’s hard to imagine this not being at the top of anyone’s list of important issues.
Note: WP would love to hear from financial advisors on this hot-button issue. Feel free to comment below or contact me via email.